Comptroller, retailers agree on sustainability, workplace compliance

Published 10:01 pm, Friday, March 29, 2013

Two major nationwide chain stores for electronics and housewares have agreed to have global suppliers begin revealing how products rate in terms of environmental compliance, workers rights and safety, and human rights.

Bed, Bath and Beyond, and Best Buy, which together have more than 2,000 locations and $60 billion in annual sales, agreed to push suppliers to start providing so-called sustainability reports, under an agreement announced Friday by state Comptroller Tom DiNapoli.

The agreements marked the fifth time since 2011 that DiNapoli, using his clout as head of the state pension fund, which holds stock in many consumer companies, has convinced businesses to publicly embrace sustainability efforts. The pension fund holds $17.6 million in Best Buy stock and $45.4 million in Bed, Bath and Beyond stock.

In an agreement with DiNapoli this month, Dunkin' Donuts agreed to start planning a switch to environmentally sensitive palm oil that doesn't require deforestation, which has been identified as a major environmental problem. The vegetable oil is used in making baked goods and an increasing array of consumer goods.

"Companies face significant legal, reputational and operational risks when their suppliers do not promote sustainable business practices," DiNapoli said. Due to the agreements, the comptroller withdrew shareholder resolutions with Best Buy and Bed, Bath and Beyond urging sustainability efforts.

Last year, financial risk caused when companies engage in non-sustainable business practices were highlighted when Apple came under fire for using Chinese manufacturers who employed child labor or exploited workers by requiring unreasonable working hours. Apple's stock price slumped during the last year, despite record sales.

"Best Buy's efforts send an important signal to investors that the company values compliance and ethics as key components of good corporate governance practices," says Meredith Miller, chief corporate governance officer for the United Auto Workers union, which had filed the shareholder resolution with DiNapoli.

Representatives for Best Buy and Bed, Bath and Beyond could not be reached for comment.

However, in a March 8 letter to DiNapoli, Best Buy Vice President Todd Hartman said the company would "encourage our 20 most strategic suppliers to produce regular sustainability reports. Such reports support "our ability to manage risk," he also said.

Bed, Bath and Beyond will apply the new standards to its vendors beginning January 2014, according to a Feb. 27 letter to DiNapoli from company Vice President Michael Callahan.